A loan is a contract between a borrower and a lender in which the borrower receives an amount of money that they are obligated to pay back in the future.
Fixed periodic payments until loan maturity
Loan calculations are based on standard mathematical formulas. Actual loan terms may include additional fees, insurance requirements, or other conditions that affect the total cost of borrowing.
Borrower puts up an asset as collateral.
No collateral involved.
Interest Rate: The percentage charged on the loan
Principal: The original loan amount borrowed
Term: The length of time to repay the loan
Amortization: Process of paying off debt over time
Determine affordable monthly payments before applying for loans.
Compare different loan offers and terms to find the best option.
Plan extra payments to reduce total interest and payoff time.
Important: Loan calculations provide estimates based on standard formulas. Actual loan terms may include additional fees, insurance, or conditions. Always review loan documents carefully before signing.
Lenders typically prefer a debt-to-income ratio below 36%. This means your total monthly debt payments (including the new loan) should not exceed 36% of your gross monthly income. Calculate this before applying to understand your borrowing capacity.